Lawyer charged $184,000 to manage $350,000 estate

The late Mr Hoare's house in Piha is at the centre of the breach of trust case over a solicitor's management of an estate. Picture / Greg Bowker

An Auckland solicitor who charged $184,000 to administer a $350,000 estate is facing a charge of criminal breach of trust.

The charge, which is rarely laid, carries a maximum penalty of seven years' imprisonment.

A depositions hearing in the Auckland District Court heard this week that the main asset in the estate of Leonard Hoare, who died in June 1994, was a house in Piha that was sold in 1997 for $347,500.

The house was bought in 2002 for $532,000 by a trust associated with musician Tim Finn and his wife, Marie Azcona.

JPs were told by prosecutors Deborah Marshall and Mike Heron that after Mr Hoare died, his wife Velda was bequeathed a life interest in the house, and his five sons from an earlier marriage were to inherit whatever was left when she died.

The 52-year-old solicitor, who has interim name suppression, was appointed the executor and sole trustee of the estate.

After the 1997 sale of the house, Mrs Hoare moved to Picton, buying a property for $212,000.

The balance of more than $100,000 was supposed to be put in a bank account, earning interest.

Instead, the Crown says, the lawyer used it to pay his fees.

The Crown also maintains that the solicitor took out a $60,000 mortgage on the Picton property in order to pay further charges.

His fees amounted to about $150,000, with a further $32,000 spent consulting other lawyers for advice.

The Crown says the administration of such a small estate should have been relatively straight-forward, incurring only a fraction of the fees charged by the solicitor.

One of Mr Hoare's sons, Greg Hoare, told the JPs that the solicitor was a "scoundrel" whose exorbitant fees were based on fictitious work.

From cross-examination by the solicitor's barrister, Paul Davison, QC, it was clear the defence maintained there was a dispute between Mrs Hoare and her stepsons.

The sons were threatening to sue the solicitor and the expenses he incurred were to protect her position, as well as his as trustee.

One of the lawyers the solicitor consulted, Stephen Piggin, told the court the solicitor told him that before Mr Hoare died, he warned that there might be trouble with his sons after he was gone.

The solicitor told Mr Piggin that Mr Hoare said someone would have to stand up to them for Velda's sake.

Mr Piggin said that in the three years he was advising the solicitor, he believed that the solicitor was in a difficult situation.

The sons were questioning and challenging everything the solicitor did and he was receiving provocative and disparaging letters from the sons' lawyer.

Barrister Janice Urlich, who carried out the costs revision for the Law Society, said the solicitor might have been "over-zealous" in his time recording and that she ordered him to reduce a $43,500 bill by $8300.

But she saw no evidence of the solicitor "creating" work.

Ms Urlich said that much of the fees would not have been incurred but for the attitude of the sons and their lawyer, whose accusations and questioning required a response from the solicitor.

"They were the author of their own misfortune."

But Robert Narev, a former partner in Glaister Ennor, who specialised in estate work, said he had never heard of fees of the magnitude of $184,000 charged for work on a $350,000 estate.

He said the solicitor's work in preparing for the cost revision or in anticipation of being sued should not be charged to the estate, though if the complaint was unsuccessful he could seek costs.

Mr Narev said it was a little difficult to see why extensive work needed to be done in a situation where the only asset was a single property occupied by a beneficiary of the will.

If there were no additional complications, he would have expected the annual fee to administer such a property to be "in the hundreds of dollars rather than the thousands."

The depositions hearing continues next week.